31st
Dec 2024
Despite the Labour government's plan to abolish fixed-term tenancies, both tenants and landlords are pushing for longer tenancies.
According to a survey from one of the largest property services groups in the UK, both landlords and tenants are seeking security in an unpredictable private rented sector, with some landlords even willing to lower rents to retain long-term tenants
The Renters' Rights Bill aims to replace fixed-term tenancies with periodic tenancies, a move expected to create significant disruption, especially in the student rental market.
The survey by the company shows that 44% of both tenants and landlords now prefer one-year fixed-term contracts.
One landlord stated: “As a new landlord, I’d like to build open, transparent relationships with my tenants to encourage longer-term rentals.”
Another landlord emphasised the considerable challenges in different regions, saying: “The reduction of rental properties in Stamford has pushed tenants to seek longer agreements to ensure they can stay in the area.”
The Group reports that an increasing number of landlords are keen on keeping long-term tenants and are ready to adopt loyalty-boosting strategies.
The survey indicates that 30% of landlords are contemplating property upgrades, 15% are willing to offer rental discounts, and 6% are considering flexible lease terms.
The national lettings managing director of the group, said: “The economic landscape has heightened the value of stability for tenants and landlords alike.
“As inflationary pressures and the cost-of-living rise, we’re seeing tenants opt for longer-term agreements as a way to secure current rental rates, while landlords are prioritising tenant retention through incentives and flexible terms.
“As both landlords and tenants navigate these economic pressures, flexibility and incentives are emerging as key factors in tenancy negotiations. The shift towards longer-term arrangements provides an opportunity for industry stakeholders to meet evolving tenant demands while ensuring stability across the rental market.”
The report points out that some regions have seen rent reductions to retain long-term tenants. Zoopla's September 2024 PRS report notes that rental inflation has decreased to 5.4%, which is the lowest rate for virtually three years ago.
According to Chris Myers, regional lettings director, Bournemouth has experienced substantial rent reductions, he said: “We have seen viewing numbers drop in Bournemouth, showing a slow in demand, so we have had to initiate significant rent reductions to keep activity consistent.
“Particularly in the South West, we have seen demand slow which is typical for the time of year but in turn rents then come down to combat that slow-down in market transactions.”
News Archive »